Larry Summers warns of economic carnage, millions of lost jobs as a result of Trump’s tariffs

New York Post - Apr 8th, 2025

Former Treasury Secretary Lawrence Summers has issued a stark warning that the United States is increasingly likely to face a recession, primarily due to escalating tariffs, which could potentially result in the loss of two million jobs nationwide. Speaking on Bloomberg Television’s Wall Street Week, Summers highlighted the potential economic impact of President Trump's proposed tariff increases, comparing them to the infamous 1930 Smoot-Hawley tariffs. He advised against continuing with these policies, which have already caused significant market volatility and investor anxiety. The Dow experienced a dramatic rise of over 1,000 points, only to retreat as new tariffs on China took effect and trade tensions deepened.

The potential recession is gaining attention from major financial institutions, with Goldman Sachs and JP Morgan Chase adjusting their recession forecasts upwards. Goldman Sachs increased its probability estimate to 45% and noted potential disruptions to the global economy. JP Morgan Chase has raised the likelihood of both a U.S. and global recession to 60%, citing inflation risks and possible retaliatory actions from other countries. These developments underscore the growing concern over economic instability, as the trade war with China intensifies and market reactions remain highly sensitive to tariff developments.

Morgan Stanley Tariffs Us Economy Goldman Sachs Us China Trade War Stock Market Volatility Lawrence Summers Recession Risk Job Loss Jp Morgan Chase

Story submitted by Fairstory

RATING

6.6

Fair Story

Consider it well-founded

The article provides a timely and relevant analysis of the potential economic impacts of tariffs, drawing on credible sources such as Lawrence Summers and major financial institutions. However, it could benefit from greater balance by including a wider range of perspectives and more detailed explanations of the economic concepts discussed. While the article is generally clear and well-structured, some technical terms may require simplification for a general audience. Overall, the story effectively highlights important public interest issues, though its impact could be enhanced with a more comprehensive exploration of differing viewpoints and potential solutions.

Accuracy

The story presents several factual claims that are mostly accurate but require further verification. Lawrence Summers' statements about the likelihood of a recession and the potential for 2 million job losses are attributed to his appearance on Bloomberg Television, which is a reliable source. However, the specific figures regarding household income loss and comparisons to the Smoot-Hawley tariffs need more precise data to support them. The story also cites Goldman Sachs and JP Morgan Chase's recession probability estimates, which are credible sources, but these figures should be cross-referenced with their official reports for accuracy. Overall, while the article provides a truthful account of Summers' warnings, some claims need additional evidence to confirm their precision.

Balance

The article primarily focuses on Lawrence Summers' perspective, which may create an imbalance in viewpoint representation. While it does mention the Trump administration's potential for striking 'some good deals,' it lacks detailed exploration of alternative viewpoints or responses from the administration itself. This could lead to a perception of bias, as the article leans towards a more pessimistic economic outlook without thoroughly presenting counterarguments or optimistic scenarios. Including more diverse perspectives, such as those from economists with differing views or government officials, would enhance the balance of the article.

Clarity

The article is generally clear and well-structured, making it easy for readers to follow the main points. It effectively outlines the potential economic consequences of tariffs and provides a logical flow of information. However, some technical terms and economic concepts, such as the comparison to the Smoot-Hawley tariffs, may require further explanation for a general audience. Simplifying these elements or providing additional context would enhance the article's clarity and accessibility.

Source quality

The article references credible sources, including Lawrence Summers, a well-respected economist with government experience, and major financial institutions like Goldman Sachs and JP Morgan Chase. These sources are authoritative and lend credibility to the claims made. However, the article could benefit from direct quotes or detailed data from these institutions to strengthen the reliability of the information presented. The mention of Bloomberg Television as a source for Summers' statements also adds to the credibility, given its reputation as a trusted financial news outlet.

Transparency

The article lacks transparency in terms of explaining the methodology behind the economic forecasts and the basis for Summers' claims. While it provides a general overview of the potential economic impacts of tariffs, it does not delve into the specific data or models used to arrive at these conclusions. Additionally, the article does not disclose any potential conflicts of interest or biases that might influence the perspectives presented. Greater transparency regarding the sources of information and the analytical methods employed would improve the article's credibility and help readers better understand the context of the claims.